Avoiding ‘Fiscal Cliff” May Be a Bad Deal for Official Washington

In Washington, many are celebrating the deal to avoid the so-called fiscal cliff. Some, like The Washington Post, are hailing the “strong bipartisan votes (on) a big, contentious issue.” Outside of Washington, however, the reviews aren’t nearly as strong.

Forty-six percent of voters nationwide approve of the deal, while the identical number disapprove. And the results are very partisan. Seventy percent of Democrats approve, while 67 percent of Republicans disapprove. Among those not affiliated with either party, most (57 percent) disapprove.

There also are indications that perceptions of the deal could quickly become more negative.

Only 50 percent of all voters now believe that middle class taxes will be heading up in 2013. The reality is that payroll taxes are going up. A middle class worker earning $50,000 a year will pay $1,000 more in taxes. Those who earn more will pay more. The evidence will be visible in everyone’s first paycheck of 2013.

The reality of a tax hike stands in stark contrast to the political rhetoric of the past month. Every politician from the president to rank-and-file members of Congress has said that the deal would mean higher taxes for upper-income Americans but that a middle class tax hike would be avoided.

That contrast will certainly not help the credibility of our elected politicians or the federal government. The good news for the Political Class is that expectations were very low.

Since Election Day, a solid majority of voters has favored a “balanced approach” to cutting the deficit that includes both tax hikes and spending cuts. Most voters wanted the deal to include more on the spending cut side, but they understood that official Washington has different priorities. From the beginning, voters expected that, despite their preference, any deal would include more tax hikes than spending cuts.

Heading into the final days of 2012, just 5 percent of voters believed Congress is doing a good or an excellent job. There’s not much room for that rating to fall further, but the gap between rhetoric and reality on tax hikes might be enough to further damage congressional approval ratings.

The president’s approval ratings are sky-high at the moment, largely because he did accomplish his goal of raising taxes on upper-income Americans. That was viewed by voters as a matter of fairness rather than economic policy. With that victory behind him, Obama will now face the more challenging task of dealing with the reality of ongoing federal spending that dwarfs any conceivable level of potential tax revenue.

That’s the biggest reason perceptions of the fiscal cliff deal are likely to get worse. The hype was huge, but the reality was much more modest. There was never any serious deficit reduction on the table. In the wake of the deal, 68 percent of voters still believe the president and Congress are unlikely to reach agreement on a plan to significantly reduce federal spending and deficits.

That just shows that voters are paying attention. During the fiscal cliff debacle, political parties made it clear that they are more interested in protecting their favored interest groups. Republicans say everything should be cut except defense. Only 26 percent of voters agree with that view. Democrats think entitlements should be off limits. Only 18 percent of voters agree.

As a result, compromise in Washington means agreeing to keep spending going up as it has for decades. The last time government spending went down in America was 1954. That’s not the sort of compromise voters are looking to see.